Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  Equities  >  London Stock Exchange  >  Rio Tinto plc    RIO   GB0007188757

SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

North American wire makers buy foreign rod on Alma outage

share with twitter share with LinkedIn share with facebook
share via e-mail
0
04/25/2012 | 09:26pm CET

North American cable and wire producers are buying more aluminum rod abroad at higher premiums due to production problems at Rio Tinto Alcan's Alma smelter in Quebec and Alcoa Inc's (>> Alcoa Inc.) Massena West smelter in upstate New York, market participants told Reuters.

North American cable and wire producers are buying more aluminum rod abroad at higher premiums due to production problems at Rio Tinto Alcan's Alma smelter in Quebec and Alcoa Inc's (>> Alcoa Inc.) Massena West smelter in upstate New York, market participants told Reuters.

Alma's rod customers have been scrambling to import raw material, some for the first time and from as far as Southeast Asia. Domestic rod producers have little spare capacity to fill the gap left by the 438,000-tonnes-per-year smelter, which slashed output by two-thirds more than three months ago.

Rio Tinto (>> Rio Tinto Limited) (>> Rio Tinto plc) cut production and declared force majeure in early January after locking out unionized workers due to a dispute over demands to limit the use of subcontract workers and guarantees of a certain number of union jobs at the plant.

There is no end in sight to the stand-off, with no new talks scheduled with the union, a spokesman said this week.

"Right now I am buying about 60 percent of my requirements for the United States outside of North America," said a source at a large, international cable maker who usually buys rod for his U.S. and Canadian operations from Alma but has gone abroad for the first time.

Importing is more complicated for inexperienced buyers, and costlier with freight and customs duties, said a smaller U.S.-based cable maker and Alma customer who has shipped metal into North America.

The first cable maker said he is paying twice as much to ship material from Asia-Pacific, Northern Europe, South America and the Middle East compared with his 2012 contract levels.

"Any pounds that I can find, I am buying," he said.

Cable makers would not say how much they were paying, but rod premiums are calculated using the Midwest ingot premium as a base.

That is already close to record highs at around 9-9.5 cents per lb, up from 8 cents at the start of the year due to overall supply tightness, with some traders saying they would not sell for less than 10 cents.

Rod, bar and profile imports into the United States rose more than 25 percent to over 11,400 metric tons (12,566 tons) in February from a year earlier, data from the U.S. International Trade Commission shows.

The race to replace Alma means desperate consumers are buying quality below their specifications. Alma produced high-purity rod, typically used in electrical transmission lines.

"It's to the point where if material is coming in that doesn't exactly meet your specs, you make it work," a physical dealer said.

Alcan's North American rival, Alcoa, has sold some spare output to Alma's customers, Timothy Reyes, president of Alcoa Materials Management, told Reuters.

But few producers have spare output as they sell on long-term contracts, another producer said.

Opportunities for domestic suppliers to fill the Alma gap have been limited further by the shutdown of Alcoa's Massena West casthouse following a fire at the end of March.

The U.S. producer continues to assess the damage, but there is no timetable for a restart, Chris Ayers, president of Alcoa's global primary aluminum business, told Reuters.

Massena West is smaller than Alma, with overall annual capacity of 130,000 metric tons, but traders said it has exacerbated the tightness. Massena West's annual rod capacity is 25,000 metric tons versus Alma's rod capacity of 100,000 metric tons.

(Additional reporting by Carole Vaporean; Editing by Josephine Mason and Dale Hudson)

By Chris Kelly

Stocks treated in this article : Alcoa Inc., Rio Tinto Limited, Rio Tinto plc
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on RIO TINTO PLC
12/02 RIO TINTO PLC : Pomerantz Law Firm Investigates Claims On Behalf of Investors of..
12/02 INVESTIGATION FOR INVESTORS IN SHARE : RIO) Announced
12/02 Turquoise Hill suspends Mongolia mine shipments to China
12/02 RIO TINTO : *ubs raises rio tinto price target to 3500 pence - 'buy'
12/02 RIO TINTO : under probe over Moza impairment
12/01 RIO TINTO : *exane bnp raises rio tinto price target to 3400 pence - 'neutral'
12/01 TOP NEWS : Rio Tinto Confirms US Probe Into Mozambique Writedown
11/29 CITIC aims to cut costs at Sino Iron project, ramp up output
11/29 Britain, Mongolia pledge to do more mining together
11/28 RIO TINTO : *jefferies raises rio tinto price target to 3600 pence - 'buy'
More news
Sector news : Integrated Mining
12/02 Turquoise Hill suspends Mongolia mine shipments to China
11/29DJBrazil's Vale Hopes for Samarco Mining Operations Restart in Mid-2017 -- Upda..
11/29 CITIC aims to cut costs at Sino Iron project, ramp up output
11/29 Britain, Mongolia pledge to do more mining together
11/29 Britain should speed up military shipbuilding to create jobs - report
More sector news : Integrated Mining
News from SeekingAlpha
12/01 Freeport-McMoRan Inc. - The Go-To Copper Investment Vehicle
11/30 Aluminum, Stick Or Twist, Bubble Or Burst
11/30 Iron ore extends pullback from two-year high as China tightens trading rules
11/29 REUTERS : Rio seeks iron ore premium from China mills in price war revival
11/29 Iron Ore Thrives On Uncertainty
Advertisement
Financials ($)
Sales 2016 33 801 M
EBIT 2016 6 928 M
Net income 2016 4 451 M
Debt 2016 11 532 M
Yield 2016 3,15%
P/E ratio 2016 15,73
P/E ratio 2017 13,83
EV / Sales 2016 2,42x
EV / Sales 2017 2,22x
Capitalization 70 434 M
More Financials
Chart RIO TINTO PLC
Duration : Period :
Rio Tinto plc Technical Analysis Chart | RIO | GB0007188757 | 4-Traders
Full-screen chart
Technical analysis trends RIO TINTO PLC
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 27
Average target price 38,5 $
Spread / Average Target 1,1%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Jean-Sébastien Jacques Chief Executive Officer & Executive Director
Jan Petrus du Plessis Chairman
Christopher J. Lynch Chief Financial Officer & Executive Director
Paul Mathias Tellier Independent Non-Executive Director
Ann Frances Godbehere Independent Non-Executive Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
RIO TINTO PLC52.97%70 434
BHP BILLITON LIMITED36.67%96 067
BHP BILLITON PLC76.18%96 067
RIO TINTO LIMITED29.17%70 434
GRUPO MEXICO S.A. DE C..56.10%21 765
ANGLO AMERICAN PLC303.24%21 172
More Results